William Hill’s profit levels coming up strongly online

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BOOKMAKER William Hill’s “outstanding” online performance helped to drive a 13 per cent surge in half-year pre-tax profits.

The group, which has a chain of 2,370 betting shops in Britain, is expanding overseas and through its online and mobile business.

Pre-tax profits at the group increased to £143.3m in the 26 weeks of the end of June, versus £126.9m a year earlier.

Its online business delivered a 23 per cent surge in operating profits to £68.9m on a 30 per cent jump in revenues to £198.4m.

Chief executive Ralph Topping said: “Our focus on innovation and investment (is) continuing to deliver outstanding growth at William Hill Online.

“With further innovation to come, the group is in good shape and the board remains confident of its expectations for the full year.”

Founded in 1934, William Hill employs more than 15,000 people, including around 3,000 staff in Yorkshire, of which about 1,100 are based in Leeds.

Its office in City Walk handles the group’s finance function and employs 300 staff, while 700 employees at its Merrion Street office cover research and development, design and broadcast.

Innovations include its Sportsbook app, top-ranked at the Apple App Store, and has added more than 40,000 new customers.

That helped mobile to grow to 22 per cent of online sports betting turnover.

The UK’s largest bookmaker was boosted by favourable results at key events such as the Grand National and the Cheltenham Festival, although was dented by the success of favourites in the Premier League and Euro 2012. William Hill generates more than 90 per cent of its revenues in Britain but is seeking to expand overseas. It recently completed the acquisition of three United States businesses in the state of Nevada and is one of a number of companies to take licences in Spain in June.

Mr Topping said: “Though their contribution to the group today is small, they represent an important strategic step for William Hill as we look to build our international business.”

Analysts at Investec Securities raised their earnings forecast by four per cent.

“We continue to regard William Hill as our key pick in the gambling sector, demonstrating strong cash generation in retail from a market-leading position, as well as excellent growth in online revenue and profits, again, as UK market leader,” they said.

“UK and European consumer trends, amidst continued economic woes, may weigh marginally on future trading, although gambling, and in particular William Hill, has proven to be a resilient sub-sector of the consumer space.”

Analysts at Shore Capital added: “We retain our buy recommendation, based upon the twin pillars of continued stability in UK retail and medium-term robust growth from its online division.”